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MENAFN- Daily Forex) WTI Crude Oil dropped below the 70.000 USD on Wednesday, and although it tried to fight higher afterwards, sustaining reversals proved difficult and the commodity finished the week near 68.520.
Traders were treated to a full week of price velocity within WTI Crude Oil as behavioral sentiment shifts in global financial markets clearly started to express nervousness. While WTI Crude Oil began last Monday near the 73.750 ratio and worked above the 74.000 mark late into the day, by early Tuesday price velocity lower began to hit. Lows for Tuesday began challenging the 70.750 mark and an early low on Wednesday saw WTI Crude Oil fall below 70.000.
Yes, there was a reversal higher also on Wednesday, but it wasn't able to be sustained as the 72.000 level was momentarily tested. The selling after the reversal higher quickly ran out of power and suddenly WTI Crude Oil was again trading below 70.000 and near the 69.300 level late in the day. Again on Thursday another reversal higher happened, but this time only the 71.250 vicinity saw a high.
Top Forex Brokers1 Get Started 74% of retail CFD accounts lose money Behavioral Sentiment and Nervous Selling in Crude Oil
So what happened and why did WTI Crude Oil fall to a low of nearly 67.550 on Friday before slightly recovering and going into the weekend around 68.524? Clearly large traders are becoming increasingly concerned by weak U.S economic sentiment and the notion potential recessionary pressures are building. The selloff on Tuesday in Crude Oil took place when global financial markets saw equity indices tumbling and other assets becoming increasingly fragile. Things certainly didn't get better on Friday, this when bad U.S jobs numbers results cemented the fear about a slowdown in the U.S.
WTI Crude Oil will open trading tomorrow morning near price ratios it last saw in December of 2023 and terrain that it has not seen sustained lower price action since March through June of 2023. Questions concerning potential demand for WTI Crude Oil seem to be a key feature regarding outlook for large traders over the mid-term. The notion that the U.S economy may stumble the next handful of months will not be welcome news to producers who would certainly like to see a stable support level around the 73.000 to 75.000 price to insure profits Nervousness Coming this Week in WTI Crude Oil
WTI Crude Oil values are not created in a vacuum. Day traders should remember what happened to Crude Oil prices during coronavirus when futures pricing went below zero momentarily. Thankfully, the price of WTI Crude Oil is not suffering from a 'Black Swan' financial event via a pandemic, but nervousness within financial institutions certainly has an effect on large players in the energy sector. If WTI Crude Oil sustains a price below the 70.000 this week it would not be a welcomed signal for bullish traders.
Day traders should pay attention to the opening in Asian markets on Monday. If global financial indices produce nervous selling, this may create additional selling among commodity traders including WTI Crude Oil in the short-term. If WTI Crude Oil remains within sight of its current prices and flirts with lows seen this past Friday, speculators who do not have deep pockets should be extra careful because volatility will develop and create a fast market.
WTI Crude Oil Weekly Outlook:Speculative price range for WTI Crude Oil is 65.310 to 72.600
Dangerous price velocity caused widespread volatility in WTI Crude Oil last week. It is possible more volatility will be seen in the coming days. If global financial markets remain jittery there will be a knock-on effect in commodities and WTI Crude Oil could trade lower. Technical traders looking for downside projections will need long-term charts, but if the 67.000 level begins to get tested and falters, prices for the commodity could move to values not seen since the spring of 2023.
Traders who believe WTI Crude Oil is oversold will eventually be proven correct, but timeframes are important in speculation and if the near-term remains nervous a prolonged bullish trend will remain very hard to accomplish. Instead, speculators with a taste for upwards momentum should seek quick hitting trades when they feel support levels are proving durable.
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